Ganglioside GM1 is the cell surface receptor for cholera toxin (CT). The pentameric B subunit of CT binds to GM1 whereas the A subunit of CT is involved in activation of adenylyl cyclase. The A subunit is reduced to the A1 peptide which ADP-ribosylates the stimulatory G protein (Gs) of the cyclase. The orientation of CT when it binds, the pathway by which the A subunit enters cells and is reduced to A1, and how the latter gains access to G(s) have not yet been established . We have succeeded in clarifying some of these aspects using human intestinal Caco-2 cells, which behave in culture as differentiated enterocytes, the natural target for CT. Orientation of CT: We were able to assemble active CT at the cell surface by sequentially exposing cells to the inactive B and A subunits. Based on the known structure of CT, we conclude that CT binds to cells with its A subunit facing away from the membrane. Using antibodies to A1 and B, we were able to demonstrate that both subunits are internalized by cells. Intracellular Processing of CT: To pursue the further processing of the internalized CT, we employed specific blockers. Chloroquine and monensin, which inhibit receptor-mediated endocytosis through coated pits, had no effect on CT action. By contrast, brefeldin A, which causes disassembly of the Golgi apparatus, was a potent blocker of CT action. Although brefeldin A did not prevent the internalization of CT, it did prevent its conversion to the A1 peptide. As the latter is an essential step in the action of CT, brefeldin A may be a useful probe for delineating the intracellular processing of CT.